A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and A paid subscription is required for full access. Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). Personal values indeed. .chakra .wef-facbof{display:inline;}@media screen and (min-width:56.5rem){.chakra .wef-facbof{display:block;}}You can unsubscribe at any time using the link in our emails. All Rights Reserved. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. Reports, such as Nielsen Insights , suggest the majority (73 percent) of people would change their consumption habits to reduce their impact on the environment, and almost half . While the demand for such products remains low, the price remains high. Are consumers really willing to pay more for sustainable products? Products with a sustainability claim have continued to drive growth amid the pandemic, according to a new report from IRI and the NYU Stern Center for Sustainable Business. As a Premium user you get access to the detailed source references and background information about this statistic. Both are good tools for building trust. This behaviour isn't just limited to the wealthy in big economies. This indicates an opportunity for consumer-goods brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth, says Carol Gstalder, senior vice president, Reputation & Public Relations Solutions, Nielsen. Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. In 1998, the Council of the European Union passed a directive that setrules for the protection of farmed animals -- a directive updated in 2009 that led tofar more ethical treatment of animals there. So while not all consumers will pay more for green climate-friendly products despite the best of intentions, we can slowly nudge them to make better choices for the planet. Vietnamese consumers are the most socially-conscious among Southeast Asians, with 86 percent expressing their willingness to pay extra for products and services from firms which are committed to positive social and environmental impact, a new Nielsen survey found. This sum will continue to grow exponentially as more Millennials reach peak buying power. (1) Background: The pressure that agricultural systems' intensive management exerts on the environment concerns society. GreenPrint One overwhelming conclusion of the report? GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. You need a Statista Account for unlimited access. Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. This figure is even higher for millennials (73%) and Generation Z (72%). This is the result of a representative survey that we commissioned from INNOFACT. We assessed third-party certification, such as USDA organic and Fair Trade, and the packagings claims about undesirable traits (such as genetically modified, BPA, parabens, antibiotics, growth hormones) and positive characteristics (local, grass-fed, compostable, animal crueltyfree). Businesses are in a bind. According to our Consumers Buy The Change They Wish To See in The World report, we found that natural and organic ingredients and certifications serve as the entry level point for nearly every market when it comes to sustainability attributes consumers are searching for. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. Green consumption includes more environmentally friendly raw materials, packaging and production methods, lower carbon emissions during transportation and use, and better protection for people involved in production and trade. Social responsibility is a critical part of proactive reputation management. Nielsen's 2015 Global Corporate Sustainability Report has revealed that brands showing a commitment to sustainable practices are receiving support from consumers, who are willing to pay more for . The relative importance of sustainability during the purchase process will continue to increase. Complete study findings are available upon request, including country splits. Using multiple communication methods is important to demonstrate good deeds, such as third-party validation (news coverage), annual reports, affiliation with a respected non-profit or civic organization, employee volunteerism, advertising, or reporting actual work in the community on a web site. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. This statistic displays the share of consumers willing to pay extra for sustainable products in the Netherlands from 2014 to 2020. 2023 Nielsen Consumer LLC. The Consumer Sustainability Survey (2019) found that 72% of consumers buy more environmentally-friendly products than five years ago. Commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. Why cities should be fully recognized stakeholders within the UN system, This Architect Says Sustainable Timber Could Be The Future Of Our Cities, 3 solutions helping net-zero aviation take off, is affecting economies, industries and global issues, with our crowdsourced digital platform to deliver impact at scale. But the results should be interpreted cautiously. On the flip side, large global consumer-goods brands that ignore sustainability increase reputational and business risk. The study surveyed 10,281 consumers across 17 countries: USA (N=1,062), Germany (N=1,022), Denmark (N=771), Sweden (N=757), Brazil (N=539), China (N=516), Japan (N=516), Spain (N=515), Switzerland (N=514), UK (N=513), Australia (N=510), Austria (N=510), France (N=510), the Netherlands (N=510), Norway (N=506), Italy (N=506), UAE (N=504), including representative quotas set for age, gender, living area, education level, employment status & income level. Im seeing quite a few climate-friendly products at the supermarket. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. zharris@prosek.com, Internet Explorer presents a security risk. You need at least a Starter Account to use this feature. it is biodegradable (65%) or made from recycled packaging (60%), when it comes to making a purchase, consumers value durability . In this category, catering to consumer demand for a more sustainable shampoo not only benefits the environment, but it also bolsters the bottom line of companies smart enough to give them what they want. Our analysis did not include the term natural (which is ubiquitous but means nothing) or marketing claims related to social causes or charities. Most important, products marketed as sustainable grew 5.6 times faster than those that were not. Deloitte. I recently spent $38 on a t-shirt from abrand I would trust with my life: Janne Robinson. You can unsubscribe at any time using the link in our emails. Younger shoppers are the most willing to. Attitudes towards sustainability also vary by industry when measuring its importance as a purchase criterion, from 74 percent in Energy/utilities to 44 percent in Financial services. Given the evidence that consumer tastes are changing, an attitude of Why mess with a recipe that has worked well over the last 40 years? is the wrong one to take. . Simple economies of scale also impact on price. Businesses that under-appreciate the need for CSR do so at their peril. Consumers are trying to be responsible citizens of the world, and they expect the same from corporations. www.simon-kucher.com, Internet Explorer presents a security risk. Designed by Elegant Themes | Powered by WordPress, 66% of survey respondents are willing to pay more for sustainable goods, up from 55% in 2014, and 50% in 2013. Says Gstalder: While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. For example, one study found Spanish consumers were willing to pay 2237% more for green products, but Japanese consumers were only willing to pay 822% more for green products. Businesses must adapt to the times as consumers are voting with their wallets and Millennials, in particular, are demanding that companies put their money where their mouth is. In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts. Additionally, one third of Millennials will choose a sustainable alternative when available, whereas older generations are less likely to actively choose sustainable alternatives (24-29 percent). Voir les partenaires de TheConversation France. Theres a noticeable break between generations, with 71% and 66% of Millennials and Gen Z willing to do so, compared to only 50% Gen X, 46% of Boomers and 39% Silent Generation. And how can we encourage people to make good choices? Consumers have some understanding of what makes a product sustainable but it is not necessarily a consideration when making a purchase Although the majority of consumers recognise what makes a product sustainable i.e. Millennials want to know what companies are doing to make the world a better place. Seventh Generation, Sundial Brands, and Pukka Herbs. In fact, almost half (41%) of consumers from around the world say that they're highly willing to pay more for products that contain all-natural or organic ingredients. Sixty-six percent of global respondents say they are willing to pay more for sustainable goods, up from 55% in 2014 (and 50% in 2013). On a global scale, the percentage of consumers willing to pay a premium for. To a certain degree, products that need to have a higher degree of efficacy (such as laundry care and sanitary napkins) were more likely to have a lower share of sustainability-marketed products, perhaps because consumers are concerned about performance trade-offs. Consumer concern about the environment does not readily translate into the purchase of environmentally friendly products. Checking labels before buying. More demand would mean more production and lower unit price costs. Companies should be aware that consumers are increasingly voting with their dollars against unsustainable brands. Image:Caleb Jones/Unsplash. Sustainability sentiment is particularly consistent across income levels. More than half of Europeans (51%) said they are willing to pay more for climate friendly food. As consumers become increasingly aware of what they put in and on their bodies, theyre also interested in buyingand sometimes paying morefor products that simultaneously help the environment. BOSTON--(BUSINESS WIRE)--With COP26, the 2021 United Nations Climate Change Conference, just weeks away, a major study of more than 10,000 people across 17 countries shows that sustainability is becoming increasingly important in consumers purchasing decisions, especially as consumers see themselves, along with for profit companies, as the primary catalysts for change. For instance, while the overall shampoo category saw declines of 3.4% over a year long period ending April 2018, natural shampoos, which own 11.2% of the value share, are steadily growing at 2.2%. The legacy companies that will thrive are those that accept this shift and are willing to pivot, such as PepsiCo and Unilever. For the US, 22 percent of consumers indicate major changes to the behavior, but that number jumps to 55 percent when including those who say theyve at least made some modest changes. Retail data backs up the importance of these influencers. Some of the necessary transformation can be accomplished by reinventing legacy products, as Unilever has shown with its sustainable living brands, now delivering 70% of its turnover growth. This statistic presents the results of an online survey conducted from February 17 to March 7, 2014. Professor of Marketing and Consumer Behaviour, Queensland University of Technology. But research continues to show few consumers who report positive attitudes toward eco-friendly products actually follow through with their wallets. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. The first-ever edition of the companys Business of Sustainability Index found that nearly two-thirds (64%) of Americans are willing to pay more for sustainable products but most (74%) dont know how to identify them. Call me a geek, but I do love a good research report! We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. That across the board, consumers are willing to pay extra for one thing: sustainability. Companies have used this conventional wisdom as justification for not making their products more sustainable. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. Pay more, waste less: 32% of consumers would pay more for a product from a brand that they believe is committed to sustainability. In Taiwan, for example, where 88% of surveyed consumers said that it is extremely or very important that companies implement programs to improve the environment, there is evidence of a growing trend in natural in personal care. Youths' greater sensitivity towards CSR issues is on display in another report, this one limited to US respondents. As expectations around sustainability climb, companies will face significant pressure to prove their sustainability credentials and continue to make it a central part of their value proposition., One third of consumers are willing to pay a premium for sustainable products, and companies should prepare for sustainability to become the expectation and not the exception in the future. Some more takeaways on consumer habits: More than 8 in 10 recycle and replace lightbulbs with energy-efficient options. Today, 50 percent of consumers rank sustainability as a top five value driver, said Dr. Andreas von der Gathen, co-CEO of Simon-Kucher. Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." Get in touch with us now. When looking at both Baby Boomers and Generation X, 24 percent across each have significantly changed their behavior towards being more sustainable -- this figure climbs to 32 percent for Millennials. Those that had no such commitment grew less than 1%. Studies show that people are geared towards using sustainable products more than others. They are willing to rethink their buying habits to incorporate environmental and social product benefits into their buying decisions. 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. I don't want to support companies that don't care about how the animals and/or workers are treated, and I do want to support those that do. They expect a two-way, open dialogue with companies and their brands. Percentage points exceeding 100 percent are probably due to rounding. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. lire aussi : Brands can bring their CSR efforts to life through authentic storytelling. Numberingmore than 80 millionstrong, Millennials already account for an estimated$1 trillionof U.S. current consumer spending. Millennials make up the fastest growing force in the marketplace. For more information, visit www.nielsen.com. But brands can nudge consumers towards more eco-friendly products. As companies look to break into new markets, they must understand that each market demands its own approach. Concerned about allegations of greenwashing claiming a product is green when its not many brands are turning to organisations such as Climate Neutral, Foundation Myclimate and members of the Global Ecolabelling Network to legitimise their claims. Nielsen's 2014 Global Survey on Corporate Social Responsibility, released Tuesday, shows that 55 percent of global online consumers across 60 countries are willing to pay more for products and services from companies that are committed to positive social and environmental impact. Our own 2019 report, " The State of Consumer Spending: Gen Z . January 18, 2023. Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. Products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013. For fifteen years, Rudominer has operated on the front lines and behind the scenes of numerous communications campaigns, providing strategic counsel to public officials, corporations, trade associations, and non-profits. In more than 90% of consumer packaged goods categories, sustainability-marketed products grew faster than their conventional counterparts. In its 2015 Nielsen Global Corporate Sustainability Report, Nielson found that "66% of global consumers say they're willing to pay more for sustainable brands--up 55% from 2014." It also found that 73% of global Millennials are willing to pay extra for sustainable offerings--up from 50% in 2014. When looking at food items like coffee, I want to know first that it's Fair Trade. Products and services that are offered from socially responsible companies may be able to charge more, according to a report by Nielsen. 28 Feb 2023 --- Sustainability factors are increasingly influencing the purchasing behavior of European consumers, according to a study published by crop nutrition company Yara International via IPSOS. Consumers are voting with their dollars against unsustainable brands. Already in 2015, a Nielsen report found that 73 percent of the Millennial generation was willing to pay more for sustainable goods. All these terms are used in labelling to make us feel good if we buy products claimed to minimise harm to the planet and the environment. Again, younger generations lead the way as higher shares of Generation Z (39 percent) and Millennials (42 percent) are willing to pay for sustainability compared to Gen. X (31 percent) and Baby Boomers (26 percent). 65% would be willing to spend up to 20% more on eco-friendly products. IRIs data comes from bar scan codes at retail checkout in food, drug, dollar, and mass merchandisers. The study, which was designed to measure consumer attitudes towards sustainability, importance of sustainability and willingness-to-pay for sustainability, also focused on 17 different product/service categories of the following sectors: Consumer Goods & Retail; Automotive; Travel & Tourism; Energy/Utilities; Financial Services; and Construction/Home. This desire for sustainable products among Gen Z is robust. Queensland University of Technology apporte un financement en tant que membre adhrent de TheConversation AU. When expanded it provides a list of search options that will switch the search inputs to match the current selection. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. So when it comes to purchasing, they are doing their homework. Millennials gave an even more impressive showing, with 73 percent indicating a similar preference." This statistic presents the results of an online survey conducted from February 17 to March 7, 2014. An online survey of more than 1,000 consumers took place in July and found 68% of respondents said they were willing to pay more for sustainable products. In its2015 Nielsen Global Corporate Sustainability Report, Nielson found that 66% of global consumers say they are willing to pay more for sustainable brands up 55% from 2014. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. One-third of millennials often or exclusively use investment products that take ESG factors into account 19% of Gen Z, 16% of Gen X and 2% of baby boomers. Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. For additional market-level insights, read or Unpacking the Sustainability Landscape report. While this statistic is telling on its own, what's more telling is that 81% of those interviewed said that they planned to buy more sustainable products over the next five years.. And environmental consciousness isn't a new trend among consumers. lire aussi : People want to feel that whatever they are buying aligns with their personal values. [Online]. 9. Given that sustainability issues vary by category, we also assessed whether a claim concerned a material environmental or social issue for that category. not how pretty the blush is. To ensure consistent and accurate representation of the U.S. general population 18 years of age and older, data was weighted by the following variables: sex, age, geographic region, race/ethnicity, and education. 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. Jun 27, 2014 The willingness to pay for sustainable products has increased universally since 2011. Please create an employee account to be able to mark statistics as favorites. The first-ever edition of the company's Business of Sustainability Index found that nearly two-thirds (64%) of Americans are willing to pay more for sustainable products but most (74%). Nielsen combines sustainability into free-from, clean, simple, sustainable and . A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. Committing to sustainability might just pay off for consumer brands, according to the latest Nielsen Global Corporate Sustainability Report. About three in four Millennials (74 percent) and Generation Z consumers (72 percent) are willing to pay more for sustainable products and services, according to The Nielsen Company. 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